Those people said Google has "tens of engineers" and other staff working on the project. Google plans to freely distribute the new operating system, they said, mimicking a strategy has made Android by far the most popular operating system for smartphones, powering more than one billion phones.

If the report is true, an Android for virtual reality applications would join Android Wear, Android TV, and Android Auto as the latest entry in the line of Android versions tweaked for specific devices and scenarios.

Google has already flirted a bit with virtual reality — albeit on a much smaller scale — with its Google Cardboard headset that allows users to experience virtual reality scenarios using an inexpensive cardboard viewfinder and their own smartphone. However, with the virtual reality market heating up with offerings from Samsung with its Gear VR headset, and HTC with its recently-announced Vive, it would make sense that Google might be experimenting with an increased push into the territory.